Fiscal 2018 Full Year Results Presentation...Fiscal 2018 Full Year Results Presentation FY2018 highlights 44 Total revenue $373.2m Up 3.0% on FY2017 Full year dividends Net debt7.75cps

Sandhill (TAS)

Fiscal 2018 Full Year Results Presentation

Andrew Sudholz CEO & Managing Director

Chris Price Chief Financial Officer

27 August 2018

Fiscal 2018 Full Year Results Presentation 2

Contents Section one FY2018 overview 3

Section two Strategic initiatives 12

Section three Industry and business observations 22

Section four Summary and outlook 26

Section five Appendices 28

Central Park (VIC)


Section one

FY2018 overview

3

Scottvale (VIC)


FY2018 highlights

44

Total revenue

$373.2m Up 3.0% on FY2017

Full year dividends

7.75cps Interim: 4.0cps (franked to 65%) Final: 3.75cps (franked to 50%)

EBITDA

$50.7m Down 15.8% on FY2017 due to occupancy pressure and the absence of ACFI indexation

Net debt

$116.3m $30.3m core debt

$86.0m development debt

NPAT

$23.3m Down 21.5% on FY2017

Net RAD inflows

$41.6m Occupancy

Underlying occupancy of

94.4% as at 30 June 2018

Care

100% accreditation

record maintained 19

re-accreditations during

FY2018

Capital expenditure

$108.2m spent on land

and improvements

Good progress on strategy in a challenging operating environment


FY2018 growth highlights

5

Significant development and acquisition activity in line with strategy, with operational places

increasing by 6%

Greenfield developments

• Riverside Views completed (88 places)

and another 220 new places (3 homes)

to open in the next three months

Brownfields developments

• 136 premium rooms delivered in the last 18

months and 101 in progress

Acquisitions

• Riviera Health portfolio acquired and

integrated (210 places plus 297 surplus

licenses)

• Significantly increases presence in Sydney

market

• $3.5m+ EBITDA contribution in FY2019

Significant refurbishment

• Six homes significantly refurbished in

FY2018 with a further eight to complete

in FY2019

• 21 homes currently qualifying for the

maximum accommodation supplement

Mount Waverley render (VIC)

Robina render (QLD)


FY2018 earnings

6

Brownfield developments and operational initiatives offset wage rate increases during a period of

Government revenue indexation freeze

52.2

47.4 50.7

3.9

3.3 6.4

2.7 1.6

1.3 3.3

30.0

40.0

50.0

60.0

FY2017recurringEBITDA

Completedbrownfields

Operationalinitiatives

Wage rateincreases

Occupancy Pre-reformincome run off

Other FY2018recurringEBITDA

Non-recurringEBITDA (net)

FY2018EBITDA

FY2018 EBITDA bridge ($m)

• Strong earnings contribution from recently completed brownfield developments and operational initiatives

• Impact of wage rate increases material particularly due to the absence of ACFI indexation (to recommence in FY2019)

• Occupancy during the period impacted by unusually severe influenza outbreaks and has recovered to 94.4%1

• Impact of pre-reform income run off will reduce going forward

• Net non-recurring items of $3.3m comprises net gain on Riviera Health portfolio acquisition, revaluation gains, capital refurbishment deduction (CRD)

adjustments, redundancies and other items (refer to page 32 for a detailed reconciliation)

• 2H FY2018 recurring EBITDA is $23.9m. 1H FY2018 recurring EBITDA was $23.5m after normalising for $1.4m in refunded CRDs

• FY2018 effective tax rate of 21% lower than FY2017 (30%) primarily due to the Riviera Health portfolio acquisition

Notes:

1. Average underlying occupancy as at 30 June 2018 includes all homes but excludes 71 places offline for significant refurbishment.

116.3

30.3

19.6

19.6

78.8 9.8

40.3

(35.5)

(41.6)

25.9

0.6

86.0

-100.0

-50.0

-

50.0

100.0

150.0

Net debt as at30 June 2017

Cash fromoperatingactivities

Net RADinflows

Landpurchases

Construction IT &maintenance

capex

Rivieraacquisition(incl. costs)

Dividends Proceeds fromissue of sharecapital (DRP)

Net debt as at30 June 2018


Financial position

7

FY2018 net debt movement ($m)

• Net debt increased due to investment in growing and enhancing the portfolio via the acquisition of the Riviera Health portfolio, development and significant

refurbishment

— Core net debt of $30.3m (0.6x EBITDA)

— Development debt of $86.0m to be reduced by net RAD cash inflows of $70m expected from new homes at Rye, Glen Waverley and Brighton-Le-

Sands and a brownfield extension at Kingston Gardens all opening in the next three months. New debt on other developments to be incurred.

• Japara remains well within its lending covenants

• Cash and undrawn bank facilities were $94m as at 30 June 2018

• Total assets of $1,268.6m supported by $533.8m of shareholder funds

• Cash from operating activities impacted by redundancies, capital refurbishment deduction adjustments, home start up losses and other items (refer to

page 32 for a detailed reconciliation)

Development net debt

largely attributable to

Glen Waverley, Rye,

Kingston Gardens and

land holdings

Strong financial position with capital invested in expanding and enhancing Japara’s portfolio

Development debt Core net debt


Key operational metrics

8

2H FY2018 1H FY2018 2H FY2017 1H FY2017

Number of homes 48 44 43 43

Operational places 4,069 3,906 3,841 3,840

Average underlying occupancy1 94.0% 92.3% 94.7% 94.4%

Average revenue per occupied bed day ($)2,3 276.7 275.0 273.4 274.9

Average Government revenue per occupied bed day ($)2 199.8 198.1 196.6 198.4

Staff costs to revenue2,3 69.5% 70.3% 70.7% 68.7%

Non-wage costs to revenue2,3 16.6% 16.5% 15.4% 16.0%

Average concessional residents4 38.7% 38.2% 39.0% 37.9%

Average incoming bed contract price ($’000) 323.9 350.6 351.7 339.7

Net RAD/Bond & ILU loan inflow ($m) 15.7 25.9 26.7 29.0

Notes:

1. Average underlying occupancy in FY2017 excluded homes undergoing development in the

FY2017 year. In FY2018 all homes are included. 71 places in H2 were offline for significant

refurbishment.

2. Metrics shown exclude the impact of all non recurring items.

3. Prior period comparatives have been adjusted to exclude CRD revenue in those periods. 4. Calculated as the number of concessional residents: operational places.

Proactive strategies on occupancy and staff costs led to improved results in 2H FY2018

Operational places movement

30 June 2017 3,841

Riverside Views +28

Central Park +25

Kirralee +12

31 December 2017 3,906

Riverside Views +24

Riviera Health +210

Significant refurbishment -71

30 June 2018 4,069

90.0%

91.0%

92.0%

93.0%

94.0%

95.0%

96.0%

Jun-17 Sep-17 Dec-17 Mar-18 Jun-18

Occupancy

Occupancy was impacted by the severe 2017 influenza season but has recovered to historic average

levels, with 2018 rates of illness lower than previous years

-

20,000

40,000

60,000

80,000

100,000

January March May July September November

2010 2011 2012 2013 2014

2015 2016 2017 2018

Notes:

1. Portfolio underlying occupancy includes all homes but excludes 71 places offline for significant refurbishment.

2. Source: Department of Health, Monthly notifications of laboratory confirmed influenza, Australia.

Portfolio underlying occupancy1 Notifications of laboratory confirmed influenza, Australia2

9 Fiscal 2018 Full Year Results Presentation


Average room price and resident mix trends

10

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RAD DAP Combination

• Recent trend up in residents preference to pay RADs

• Average incoming bed prices over FY2018 lower due to proactive

temporary reduction of bed prices in 2H FY2018 at selected homes to

address occupancy pressures created by the 2017 influenza season

• Average incoming bed price expected to grow going forward as high

quality, metro located developments are delivered

Payment preference of incoming non-concessional residents Average incoming bed contract price ($’000)

Total portfolio mix as at 30 June 2018 (pcp in brackets)

55.3% (56.0%)

17.6% (17.3%)

27.0% (26.7%)

RAD

Combination

DAP

Increased resident preference for RADs underpinned solid net RAD cash inflows notwithstanding lower

average bed contract prices

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FY2018 RAD liability movement

11

Both mature homes and developments contributed to FY2018 net RAD cash flow

Net RAD cash flow ($m)

• Net RAD liability movement of $43.3m in FY2018 and $13.0 assumed with Riviera Health portfolio acquisition

• $23.6m from mature homes

• $16.6m from completed greenfields and brownfields

• $2.0m from Riviera Health since acquisition

• $1.1m of net other RAD adjustments

• FY2019 RAD uplift expected as new homes come online

385.0 441.4

430.7

138.3

114.7

15.0 16.6 1.1 487.0

0.0

100.0

200.0

300.0

400.0

500.0

600.0

RADs/Bonds at start ofyear

Incoming RADs - maturehomes

RADs/Bonds Refunds -mature homes

Net Riviera RADs/Bonds Net RADsGreenfield/Brownfield

Homes

Net other RADadjustments

RADs/Bonds at end ofyear

45.7 45.6

Probate liability


Section two

12

Strategic initiatives

Robina render (QLD)

4,0

69

4,4

49

4,7

88

5,0

87

5,3

77

71 61

60 99

56 16 17

106

106 29

38 60

106

103

90

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2


Development summary

13

Development pipeline (net new places) • Japara’s current development pipeline

comprises:

— Brownfield developments: 5 homes

— Greenfield developments: 12 homes

— Significant refurbishment: 8 homes

• Japara’s development pipeline is managed to:

— Deliver around 300 places per annum on

a consistent basis

— Ensure home commissioning can be

effectively managed with internal

resources

— Ensure peak development debt is

managed conservatively with regard to

RAD capital inflows and construction

capital requirements

• Japara continually evaluates its development

pipeline with regard to a number of

considerations including financial, operational

and development capacity

— Some development timeframes have

recently been extended on this basis

Development pipeline comprises over 1,200 net new places, expected to be delivered by the end of FY2022

Greenfield (1,081 net new places) Brownfield (156 net new places)

71 places currently offline due to significant refurbishment works


Our Sydney portfolio

14

As a result of the Riviera Health portfolio acquisition and other assets owned, we have a strong

platform for establishing a superior portfolio of new aged care homes in the Sydney market

Home Places Comment

Existing

Bayview Gardens 62 • Existing home

Riviera Health

portfolio acquisition

Chatswood 50 • Open and fully accredited

• To be significantly refurbished in

FY2019

Brighton-Le-Sands 61

27

• Greenfield due to open in October 2018

• Open and fully accredited (Jenny-Lynn

home)

• To be closed for a rebuild once

greenfield is completed

Doonside 60 • Open and fully accredited

Wyong 70 • Open and fully accredited

• Includes 4.3 Ha of land available for a

120 bed development to replace

existing home

Developments

Belrose 105 • Greenfield development (FY2022)

Total 435

Belrose (105 places)

Sydney portfolio Home locations

Sydney

Bayview Gardens (62 places)

Chatswood (50 places)

Brighton-Le-Sands (88 places)

Doonside (60 places)

Wyong (70 places)


Recent and near term developments

15

• Noosa (completed October 2017)

— Brownfield extension and full refurbishment of existing home

including a 10 room specialist dementia house adopting

international best practice design

• Riverside Views (opened October 2017)

— New 88 single room home overlooking the Tamar Valley

• Glen Waverley (opens September 2018)

— New 60 single room home with a four star ‘Green Star’

environmental rating

• Brighton-Le-Sands (opens October 2018)

— New 61 bed home acquired as part of the Riviera Health portfolio

acquisition with Japara completing the fitout

• Rye (opens November 2018)

— New 99 single bed room home located in a coastal town

approximately 1 hour from Melbourne

• Kingston Gardens (opens September 2018)

— 68 bed extension to existing Springvale home

— Existing home to be subsequently fully refurbished

• Mirridong (opens October 2018)

— 16 single bed room extension to existing Bendigo home

Riverside Views (photo) Riverside Views (photo)

Glen Waverley (render) Glen Waverley (render)

Rye (photo) Rye (render)

Kingston Gardens (photo) Newport (render)


Development case studies

16

Developments provide strong RAD inflows and earnings uplift

• Brownfield development completed in September 2016 with 24 places

added (13 net new places)

• Objective of providing more single rooms with en suites and

refurbishing all communal areas including dining rooms and lounges,

resulting in a modernised home throughout

• Net RAD cash inflows exceeded development costs

• Average room price uplift of $36,000

• EBITDA uplift in FY2018 of $1.2m

• Occupancy improvement – currently 96.5%

Kirralee (VIC) George Vowell (VIC)

• Brownfield development completed in October 2016 with 35 places

added (34 net new places)

• Objective of adding premium rooms to a high quality existing home

• Net RAD cash inflows exceeded development costs

• Average room price uplift of $45,000

• EBITDA uplift in FY2018 of $0.8m

• Strong occupancy maintained - currently 96.0%

• Circa 1,200 bed licenses owned or secured to support developments program

• Estimated resident admission dates can alter due to changes in economic conditions and town planning approval process


Development update

17

Significant greenfield development program comprising over 1,000 net new places

Program status Total new places Net new places Estimated resident

admission

Brighton-Le-Sands (Sydney) Construction 61 61 1H FY2019

Glen Waverley (Melbourne) Construction 60 60 1H FY2019

Rye (Melbourne) Construction 99 99 1H FY2019

Mt Waverley (Melbourne) Construction 106 106 1H FY2020

Robina (Gold Coast) Construction 106 106 1H FY2020

Newport (Melbourne) Tendering 120 60 2H FY2020

Mitchelton (Brisbane) Detailed design 106 106 1H FY2021

Lysterfield (Melbourne) Town planning 103 103 1H FY2021

Reservoir (Melbourne) Town planning 90 90 2H FY2021

Belrose (Sydney) Town planning1 104 104 1H FY2022

Highton (Geelong) Town planning1 136 136 1H FY2022

Wyong (regional NSW) Concept design 120 50 1H FY2022

Total 1,211 1,081

Greenfield developments

Notes:

1. Additional planning approval risk associated with these projects.


Development update (cont.)

18

Home Total new places built Net new places Completed

Noosa (Sunshine Coast) 12 0 1H FY2018

Launceston (Tasmania) 88 88 1H FY2018

Total 100 88

Home Program status Total new places Net new places Estimated resident

admission

Kingston Gardens, Springvale Construction 68 56 1H FY2019

Mirridong, Bendigo Construction 16 16 1H FY2019

Strzelecki House, Mirboo North Construction 17 17 2H FY2019

Albury, NSW Tender 29 29 2H FY2020

Brighton, SA Tender 52 38 2H FY2020

Total 182 156

Two recently completed developments with an additional five in progress

Completed developments

Brownfield developments


Significant refurbishment

19

Home Expected completion

South West Rocks (NSW) Completed (1H FY2018)

The Homestead (SA) Completed (1H FY2018)

Bonbeach (VIC) Completed (2H FY2018)

Sandhurst (VIC) Completed (2H FY2018)

Viewhills Manor (VIC) Completed (2H FY2018)

Narracan Gardens (VIC) Completed (2H FY2018)

Scottvale (VIC) 1H FY2019

Goonawarra (VIC) 1H FY2019

Roccoco (VIC) 1H FY2019

Springvale (VIC) 1H FY2019

Coffs Harbour (NSW) 2H FY2019

Gympie (QLD) 2H FY2019

Lakes Entrance (VIC) 2H FY2019

Hallam (VIC) 2H FY2019

• Significant refurbishment program improves asset quality, maintains

asset lifecycle and enhances resident experience

• Generates incremental earnings via accommodation supplements and

ability to attract higher RADs and DAPs

— Currently 21 homes qualify for the maximum accommodation

supplement

— 35 homes expected to qualify for the maximum accommodation

supplement by the end of FY2019 following the delivery of the

remaining eight homes and near term developments1

• Four homes Significantly Refurbished in H2 FY2018

• Remaining homes identified to be significantly refurbished to be

completed in FY2019

Significant refurbishment program to enhance asset quality and resident experience

Notes: 1. Near term developments includes both brownfield and greenfield developments (Glen Waverly, Rye, Brighton-Le-Sands and Kingston Gardens).


Riviera Health update

20

Location Asset type Places existing (future) Status / proposed use

Chatswood Aged care home 50 Open and fully accredited

Doonside Aged care home 60 Open and fully accredited

Brighton-Le-Sands Aged care home (existing) 30 (27)

Open and fully accredited. To be closed for a rebuild once the new home (below) is completed. 27 places proposed in rebuilt home

Aged care home (new) 0 (61) Due to open in October 2018. Residents in existing home (above) to relocate to new home

Wyong Aged care home 70 Open and fully accredited

Vacant land 4.3 Ha. Available for future 120 bed development to replace existing home

Toukley Development site 0 Aged care home closed and proposed for development or sale

Total 210 (268)

Surplus licenses 297 (239)

Japara completed the acquisition of the Riviera Health portfolio in April 2018

• Riviera Health strategically

and immediately increases

Japara’s presence in the

Sydney and broader NSW

market and provides bed

licenses and sites for future

growth

• Net purchase price of $38m (excl. transaction costs)

— New RADs of $20m+ expected from the new

Brighton-Le-Sands home reducing effective net purchase

price of Riviera Health portfolio to approximately $18m net of

RADs, which includes a value of circa $7m for vacant land

and circa $10m for surplus bed licenses

• EBITDA contribution of between $3.5m–$4m expected in FY2019

• Independently assessed value of real estate ($45.5m) and

licenses ($27.9m) in excess of gross purchase price with a $9.6m

net gain on purchase required in FY2018 accounts

Strategy

• Transfer of 507 bed licenses undertaken

in four days with Riviera Health homes

fully accredited under Japara ownership

within three weeks working closely with

the Department of Health

• Japara’s care model has been

implemented and current occupancy

of the operating homes is 98%

Integration Value


Riviera Health update (cont.)

21

Wyong (NSW) Jenny-Lynn (NSW)

Chatswood (NSW) Wyong (NSW)

Doonside (NSW)

Brighton-Le-Sands render (NSW)

Section three

Industry and business observations

22 Fiscal 2018 Full Year Results Presentation


Industry trends

23

The broader aged care industry has faced a challenging two years with ACFI rates static and currently

running below Government projections . . .

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National Projected Actual National

Industry ACFI per occupied bed day ($)1

Notes:

1. ACFI Monitoring Reports, Australian Government, Department of Health.

2016 federal

budget includes

savings of ~$1.2bn

over four years

Actual ACFI

expenditure

exceeds

projections

Actual ACFI expenditure

below projections

COPE

Indexation (1.3%)

Revised

funding

changes

announced

COPE

Indexation

(1.25%)

2015/16

MYEFO

includes

~$472m of

aged care

funding cuts


Japara care

24

… however, Japara’s superior care model has continued its record of 100% compliance to the

Accreditation Standards across the full portfolio . . .

• 19 re-accreditations during FY2018

• Acquisition of the Riviera Health portfolio and turnaround to full compliance was achieved within three weeks, working

closely with the Department of Health

• Registered nurses on every shift, every day at all Japara homes

Care

Specialised dementia care

• Japara is a leader in dementia specific care with smaller, home like living

environments which improve quality outcomes

• The Hub at Noosa – specifically designed for residents living with

dementia, opened in April 2018 and had full occupancy within a week:

— The Hub continues to have a waiting list

— Implementing the Hub concept in some of our other homes

Notes:

1. Dementia Australia: Key Facts and Statistics, 2018.

• Late stage and complex care of elderly residents staying for shorter periods of time

• Longer term residents increasing primarily with dementia and other neuro-degenerative conditions

Our resident focus

Notes

1. Since construction or significant refurbishment of home.

2. Accommodation payments include DAPs and Accommodation Supplements.

3. Sydney portfolio comprises three owned and one leased home.

4. Melbourne portfolio comprises 16 owned and three leased homes.

5. Major regional includes cities with more than 100,000 people.


Japara real estate portfolio

25

… and combined with a well located real estate portfolio, providing residents with high levels of amenity

and premium accommodation, positions Japara well to enhance its performance

44 owned residential aged care homes

$532m book value of stabilised real estate

4 leased residential aged care homes

$156m book value of developments

85% of rooms are single bed

14 years average age of homes1

$33m of accommodation related payments2

180 retirement independent living units / apartments

South West Rocks

5

3

6 3 19

Gympie

Noosa

Albury Adelaide

Victorian Goldfields

Greater Geelong

Gippsland

Launceston

Melbourne4

Coffs Harbour

Sydney3

Wyong 78% of places in metro and major regional5 locations

4

2


Section four

Summary and outlook

26


Summary and outlook

27

• EBITDA of $50.7m down on FY2017 by 15.8% largely due to occupancy pressure as a result of severe influenza outbreaks during the period and

the absence of ACFI indexation

• Strong earnings contribution from recently completed brownfield developments and operational initiatives

• Riviera Health portfolio acquisition strategically important with an excellent return on investment profile

• Balance sheet strength maintained with net bank debt of $116.3m at 30 June 2018 ($30.3m core net debt, $86.0 development debt)

Business positioned for earnings growth in FY2019

FY2018 summary

• FY2019 EBITDA is expected to be 5% to 10% up on FY2018, subject to no material changes in market or regulatory conditions, as:

— operational initiatives gain further traction

— occupancy continues to normalise

— ACFI indexation returns (1.2%) and partially offsets wage inflation

— significant refurbishment programs provide incremental EBITDA of circa $2.5m

— the Riviera Health portfolio is expected to deliver a circa $3.5m-$4m uplift in EBITDA

— developments opening are expected to increase EBITDA circa $1.5m

• Stronger earnings expected in second half due to timing of developments and operational initiatives

• Continued delivery of Japara’s development pipeline (over 300 net new places) and significant refurbishment program (eight homes)

FY2019 outlook


Section five

Appendices

Riverside Views (TAS)

28


Appendix 1: Detailed Profit and Loss

29

FY2018 FY2017 Change

$'000 $'000 % $'000

Revenue

Government care and accommodation funding 262,981 253,796 3.6% 9,185

Resident fees 98,542 100,202 -1.7% (1,660)

Other income 11,665 8,195 42.3% 3,470

Total revenue & other income 373,188 362,193 3.0% 10,995

Expenses

Employee benefits expense (258,967) (246,734) 5.0% (12,233)

Resident costs (31,874) (27,775) 14.8% (4,099)

Other costs (31,694) (27,524) 15.2% (4,170)

Total expenses (322,535) (302,033) 6.8% (20,502)

EBITDA 50,653 60,160 -15.8% (9,507)

Depreciation and amortisation (17,150) (14,255) 20.3% (2,895)

EBIT 33,503 45,905 -27.0% (12,402)

Net finance costs (3,817) (3,304) 15.5% (513)

Income tax expense (6,359) (12,889) -50.7% 6,530

NPAT 23,327 29,712 -21.5% (6,385)


Appendix 2: Detailed Statutory Cash Flow Statement

30

FY2018 FY2017

$'000 $'000

Cash flows from operating activities:

Receipts from customers 361,250 350,544

Payments to suppliers and employees (315,824) (306,726)

Income taxes paid (6,342) (8,952)

Interest received 674 644

Finance costs paid (4,263) (3,710)

Net cash provided by operating activities 35,495 31,800

Cash flows from investing activities:

Purchase of land & buildings (19,626) (7,785)

Proceeds from sale of land and buildings 313 9,770

Purchase of plant and equipment (10,158) (6,386)

Capital works in progress (78,753) (36,250)

Proceeds from sale of surplus resident places - 3,586

Purchase of aged care business (40,317) -

Deferred settlement payment for aged care business - (9,000)

Net cash used in investing activities (148,541) (46,065)

Cash flows from financing activities:

Proceeds from issue of share capital 634 3,596

Dividends paid (25,897) (29,743)

Net proceeds from bank borrowings 84,500 1,500

Proceeds from RADs and ILU resident loans 190,185 187,664

Repayment of RADs/accommodation bonds and ILU resident loans (148,594) (131,944)

Net cash provided by financing activities 100,828 31,073

Net increase/(decrease) in cash and cash equivalents held (12,218) 16,808

Cash and cash equivalents at beginning of the year 41,376 24,568

Cash and cash equivalents at end of the year 29,158 41,376

Fiscal 2018 Full Year Results Presentation 31

Appendix 3: Balance Sheet 30-Jun-18 30-Jun-17

$'000 $'000

Assets

Current assets

Cash 29,158 41,376

Trade and other receivables 9,356 15,838

Current tax receivable 2,629 1,162

Other assets 6,405 6,081

Total current assets 47,548 64,457

Non-current assets

Trade and other receivables 1,834 2,222

Inventories - 3,045

Non-current assets held for sale 1,728 1,477

Property, plant and equipment 687,720 541,776

Investment property 38,398 32,972

Deferred tax assets - 6,161

Intangible assets 491,378 463,458

Total non-current assets 1,221,058 1,051,111

Total assets 1,268,606 1,115,568

Liabilities

Current liabilities

Trade and other payables 38,570 18,876

Other liabilities 3,650 11,541

Borrowings 21,000 4,600

Other financial liabilities 509,348 453,103

Employee provisions 33,456 31,338

Total current liabilities 606,024 519,458

Non-current liabilities

Borrowings 124,500 56,400

Deferred tax liabilities 563 -

Employee provisions 3,741 3,996

Total non-current liabilities 128,804 60,396

Total liabilities 734,828 579,854

Net assets 533,778 535,714

Equity

Issued capital 522,962 522,328

Retained earnings 10,816 13,386

Total equity 533,778 535,714


Appendix 4: Non-recurring earnings reconciliation

32

FY2018 FY2017

$m $m

Non recurring items

Profit on sale of land 5.2

Profit on sale of surplus bed licences 1.5

Increase in fair value of investment properties 1.2

Redundancies / restructuring (3.4) (1.9)

Net gain on acquisition 9.6

Property revaluation gains 1.7

CRD adjustment – prior year (2.9)

Greenfield start-up losses (0.8)

Corporate office relocation provision and discontinued projects (0.9)

Total 3.3 6.0


Appendix 5: Portfolio Metrics

33

As at As at

Change 30 June 2018 30 June 17

Resident mix

Concessional 1,627 42% 1,471 41% 10.6%

RAD 1,125 29% 1,130 31% -0.4%

DAP 549 14% 539 15% 1.9%

Combination 360 10% 349 9% 3.2%

Pre-reform high-care places 35 1% 40 1% (12.5%)

Respite 115 3% 60 2% 91.7%

TCP / Other 32 1% 30 1% 6.7%

Total residents 3,843 100% 3,619 100% 6.2%

Staffing

Number of staff (including part time and casuals) 5,451 5,255 3.7%

Places

Operational places 4,069 3,841 5.9%

Non-operational places 466 135 245.2%

Provisional ACAR allocations 922 974 (5.3%)

Total places 5,457 4,950 10.2%

Places (metro/major regional, regional split)

Metro/major regional 4,231 78% 3,943 80% 7.3%

Regional 1,226 22% 1,007 20% 21.7%

Total places 5,457 100% 4,950 100% 10.2%

Geographic spread (homes)

VIC 65% 72%

SA 15% 12%

NSW 8% 9%

QLD 7% 5%

TAS 5% 2%

Total 100% 100%

Funded bed days 1,323,563 1,284,827 3.0%


Appendix 6: Indicative greenfield development

34

Positiv

e

Negative

Cash

flo

w

Land

purchase

Town planning

and design

6,000sqm at

$1,000/sqm

120 places at 95%

occupancy x 60% RAD

penetration on non-

concessional residents

120 places at 95% occupancy

at $25,000/bed EBITDA

120 places at

$250,000/bed

Construction

Fit out

Start-up operations

RAD

Capital

Inflow

Sustainable

EBITDA

RAD uplift

Years

1 2 3 4 5

70% Non-concessional

30% Concessional


Disclaimer

35

This presentation was prepared by Japara Healthcare Limited (ABN 54 168 631 052), the Company. Information contained in this presentation is

current as at 27 August 2018. This presentation is provided for information purposes only and has been prepared without taking account of any

particular reader’s financial situation, objectives or needs. Nothing contained in this presentation constitutes investment, legal, tax or other advice.

Accordingly, readers should, before acting on any information in this presentation, consider its appropriateness, having regard to their objectives,

financial situation and needs, and seek the assistance of their financial or other licensed professional adviser before making any investment decision.

This presentation does not constitute an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any

security, nor does it form the basis of any contract or commitment.

Except as required by law, no representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the information,

opinions and conclusions, or as to the reasonableness of any assumption, contained in this presentation. By reading this presentation and to the

extent permitted by law, the reader releases the Company and its affiliates, and any of their respective directors, officers, employees, representatives

or advisers from any liability (including, without limitation, in respect of direct, indirect or consequential loss or damage or loss or damage arising by

negligence) arising in relation to any reader relying on anything contained in or omitted from this presentation.

The forward looking statements included in this presentation involve subjective judgment and analysis and are subject to significant uncertainties,

risks and contingencies, many of which are outside the control of, and are unknown to, the Company. In particular, they speak only as of the date of

these materials, they assume the success of Japara Healthcare Limited’s business strategies, and they are subject to significant regulatory, business,

competitive and economic uncertainties and risks. Actual future events may vary materially from forward looking statements and the assumptions on

which those statements are based. Given these uncertainties, readers are cautioned not to place reliance on such forward looking statements. Past

performance is not a reliable indicator of future performance.

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